By Eleanor Haas
Just yesterday, at the LeWeb conference in Paris, VC, blogger and thought leader Fred Wilson identified three megatrends that his VC firm uses as a framework for investing and four areas they’re watching. Things like mobile and big data are technologies that represent too small a lens when it comes to envisioning the big opportunities to come, he said. For him and his colleagues, it’s about adopting a behavioral and societal point of view.
The three trends are networks, unbundling and smartphones, and the four areas are Bitcoin, wellness, data leakage and trust/identity.
We’re very early in the transition from slow bureaucratic hierarchies to technology-driven networks. The hierarchies were solutions of the industrial world, but today they’re obsolete – just plain inefficient. Examples? Twitter replaces the slow-moving bureaucratic news organization that sits behind every newspaper. With Twitter, the crowd determines what’s news, and we get it instantly. YouTube replaces traditional video production. Again, the crowd determines what’s important – and quality rises to the top. SoundCloud disintermediates the music industry by enabling music creators to upload, record, promote and share their sounds to be found by the crowd.
We saw this happen first in media and entertainment, but now it’s happening with hotels (Airbnb), creative services (Kickstarter) and learning (Codecademy).
Cost factors made it desirable to package and deliver products and services in bundles. Now technology makes it cost-effective to deliver focused services a la carte. Examples? Getting sports news from a different source than business news or classified ads. Finding free-standing services once bundled by banks – Lending Club and Funding Circle – asset management, education – where online classes are disrupting the traditional four-year university model – research – where technology enables researchers to collaborate freely as a network – and entertainment – where Netflix, YouTube, Hulu and VHX let us buy shows a la carte instead of having to subscribe to cable.
By carrying smartphone, we become always-on nodes in a network. Examples? Uber and Halo are disrupting taxi and limo services, rental cars and delivery businesses. Payment platforms, such as Venmo, Dwalla and Square are phone apps. Tinder is a dating app that leverages location as well as the phone.
Four Areas to Watch
Bitcoin, says Fred, is important as the transactional protocol for the Internet, not as currency. It provides a global peer-to-peer ledger and a technology-based architecture that entrepreneurs can and will build on so that payments, in time, will flow on the Internet like content and images, not controlled by any company.
Health and wellness platforms and tools, not healthcare, will be increasingly important ways to help people avoid the need for healthcare. Examples? Wearing devices that report physical activity and vital signs, a phone device that provides fertility information for women, gamified weight loss initiatives.
Data leakage is Fred’s term for how we allow our own personal data to be open for spying by Google, Facebook and the government while we ourselves have no control over it.
Trust/identity, both of which are closely allied to the data leakage area are currently managed by Google, Facebook, Amazon, Twitter. We give them access to all that we do online. In time, he predicts, there will be a protocol, just like http, that allows us to control our identity, trust and data.
So what areas are you watching? What mega trends seem to you to be significant indicators of what lies ahead?
(You can see the video of Fred’s keynote here. http://bit.ly/1cByjEg )